Stock-based compensation

3 Months Ended

Mar. 31, 2024

Share-Based Payment Arrangement [Abstract]

Stock options

During the three months ended March 31, 2024 and 2023, the Company’s stock option compensation expense was approximately $2.5 million and $3.5 million, respectively. There was no recognized tax benefit in either of the periods. As of March 31, 2024, the unamortized expense balance was $9.4 million, to be amortized over a weighted average period of 1.37 years.

Stock option activity during the three months ended March 31, 2024 is as follows:


	Shares subject to options			Weighted- average exercise price		Weighted- average remaining contractual term (years)		Aggregate Intrinsic Value (in thousands)

Outstanding as of January 1, 2024		10,376,838		$	6.38	6.9		$	—
Granted		2,885,385			1.10
Replacement options from Exchange		1,906,153			0.96
Exercised		—			—				—
Forfeited or Expired		(1,161,111	)		8.58
Cancelled options from Exchange		(3,880,332	)		10.43
Outstanding as of March 31, 2024		10,126,933			2.05		8.51		186.81
Options vested and expected to vest as of March 31, 2024		10,126,933			2.05		8.51		186.81
Options vested and exercisable as of March 31, 2024		3,076,329			3.92		6.12		15.32

The weighted-average grant date fair value of options granted during the three months ended March 31, 2024 and 2023 was $0.77 and $0.93 per share, respectively.

Option exchange

In January 2024, the Company commenced a stock option exchange program (the Exchange Offer) pursuant to which eligible employees were provided the opportunity to exchange eligible stock options for a number of new replacement option grants at the exchange ratio of 1 replacement option for every 1.4 eligible options tendered for those priced between $2.10 to $11.85, and 1 replacement option for every 3.4 eligible options tendered for those priced over $11.86. The Exchange Offer concluded in February 2024.

In connection with the Exchange Offer, the Company canceled 3,880,332 eligible options and granted 1,906,153 replacement options. The exchange of these options was accounted for as a modification of share-based compensation awards. The Company recognized $3 thousand of unamortized compensation cost related to the canceled options as well as the incremental compensation cost associated with the replacement options over their one year vesting term.

Restricted stock units

During the three months ended March 31, 2024, the Company recorded $29 thousand stock-based compensation expense related to restricted stock units. During the three months ended March 31, 2023, the Company did not record any stock-based compensation expense related to restricted stock awards. As of March 31, 2024, the unamortized expense balance was $0.1 million, to be amortized over a weighted average period of 3.5 years.

Restricted stock activity during the three months ended March 31, 2024 is as follows:


	Number of Awards				Weighted- Average Grant Date Fair Value			Aggregate Fair Value (in thousands)

Issued and unvested as of January 1, 2024		134,120		$		0.84		$	113
Restricted stock awards granted		22,950				1.13			26
Restricted stock awards vested		(2,490	)			(0.84	)		(2	)
Issued and unvested as of March 31, 2024		154,580				0.88		$	137

During the three months ended March 31, 2024 and 2023, the Company did not issue shares of common stock, upon exercise of unvested stock options or purchases for unvested restricted stock awards.

Employee stock purchase plan

During the three months ended March 31, 2024 and 2023, the Company recorded total stock-based compensation expense related to the employee stock purchase plan of $0.1 million and $0.2 million, respectively. During the three months ended March 31, 2024 and 2023, no purchases of awards under this plan have been made.

Stock-based compensation expense was allocated as follows for the three months ended March 31, 2024 and 2023 (in thousands):


	Three Months Ended
	March 31,
	2024		2023
Research and development	$	1,439	$	2,172
General and administrative		1,209		1,492
Total	$	2,648	$	3,664